Last May, we reported on proposed changes to the SBA’s Women Owned Small Business Program Certification Process. Now, the SBA’s website includes updated information about what those changes may mean for existing and new WOSBs.
As you may recall, in 2019, the SBA (at long last) proposed updates to its WOSB/EDWOSB Program in response to Congress’ 2015 NDAA. The 2015 NDAA required the SBA to remove the option for businesses to self-certify as small businesses owned and controlled by women and replace it with a more robust certification process operated directly by the SBA. The proposed updates intend to do just that.
The SBA indicates that we can expect “that the regulations enacting the statutory requirement will be published on June 30, 2020, and will be effective 30 days later.” But what will this mean for currently certified businesses?
For current third-party certified WOSBs and EDWOSBs, SBA will require re-certification “three years after the date of their most recent re-certification as a third-party certified firm.” Re-certification may be completed through the SBA’s new certification process or again through a third-party certifier.
For WOSBs and EDWOSBs who are currently self-certified with active WOSB or EDWOSB set-aside contracts, SBA clarifies that “[a] firm that was eligible as a WOSB or EDWOSB at the time of offer for the contract is considered a WOSB or EDWOSB throughout the life of the contract.” Even so, where a contract has a duration of more than five years, including options, businesses must be recertified “by SBA or an approved third-party certifier prior to the end of the fifth year of the contract.” For those familiar with SBA’s size status rules, this requirement is similar to the rule for maintaining size status on long-term contracts.
Finally, for WOSBs and EDWOSBs who are currently self-certified with no active WOSB or EDWOSB set-aside contracts, the requirements are a little more complex. If you fall under this category and haven’t been protested or examined by the SBA in the two years prior to the effective date of the new rules, get ready to start preparing your application– you will need SBA or third-party certification before you are considered an eligible WOSB/EDWOSB. In contrast, if you have been protested or examined in the two years prior to the effective date and received a positive final decision, you “must re-certify within 30 days of [your] certification anniversary if there have been no material changes since [your] last certification.” From there, you will have to “undergo a full document review and re-certification” at the end of year 3.
New applicants will be able to start from scratch and certify through the SBA directly when the rule becomes effective, or will still have the option to certify through third-party certifiers. In addition, women-owned businesses already certified through the Department of Transportation’s Disadvantaged Business Enterprise program (DBE), or the Department of Veteran Affairs’ Center for Verification and Evaluation (CVE) are at an advantage: these kinds of certification will be considered equivalent to SBA certification.
The SBA has provided an FAQ and plans to provide more updates on its webpage here. We will also continue to cover the changes as they develop, so keep an eye on the blog, or follow along on Twitter, LinkedIn, Facebook, and YouTube! And, as always, if the new rules have you scratching your head, you can call or email us!